Terry McCrann: Mass immigration is not working for Australia

By Leith van Onselen

The Australian’s business columnist, Terry McCrann, is the latest high profile figure to question the efficacy of Australia’s turbo-charged immigration program, penning the following over the weekend after recently returning from a holiday in Japan:

In Japan ‘‘things’’ worked and worked well. Drawing on the old saying, in Japan the trains run on time; and indeed, extending the metaphor, so does everything else. In Australia neither the trains literally — nor ‘‘the everything else’’ figuratively — do. Indeed, in Melbourne on Friday they didn’t run at all.

I want to look at that ‘‘big picture’’ around the most fundamental difference — in both societal and economic terms — between the two countries: population growth.

…we tended to view Japan rather condescendingly as ‘‘not working’’ because of its negative demographics and very low overall economic growth.

As the reverse is actually the case, it should give us pause, very considerable pause, about our assumptions, about our policy arrogance and indeed both the policy choices and their, for want of a better word, implementation.

Australia has of course had an uninterrupted immigration-led population growth strategy for 70 years, since the end of the World War II. But in the last decade or so we have sleepwalked into a policy of immigration-on-steroids…

The ‘‘Big Australia’’ debate has belatedly got under way. There’s a growing awareness that population-led growth is not free, but it might well be delivering profitless prosperity.

Double the population and, yes, you might double the economy — or even do better than that in macro economic terms; but once the — on balance, negative — tangible and intangible micro factors are included, it is arguably an overall negative…

Sacrificing some excess growth for livability seems a worthwhile trade. Sacrificing livability for a bigger economy statistic does not. But in any event the greater part of Australia’s strong (per capita) growth was actually last century. Over the past 10 years — which included the peak and re-peak of the mining boom — Australia’s per capita growth rate was just 1.2 per cent a year.

I note this period also includes the peak of negative livability. Further, that’s only going to worsen, especially in Melbourne and Sydney. We face the prospect of not even having the ‘‘high growth’’ partial offset.

…over the last five years, Japan’s per capita growth rate has been higher than Australia’s — running at 1.35 per cent a year as against our 1.25 per cent. That’s to say, Japan’s been getting to have its zero population growth livability and getting to eat its bigger economic cake as well.

We haven’t been getting much of the cake and a heap of negative livability…

Look across the infrastructure board and across the nation: is there anywhere where the infrastructure has led?…

That hopelessness actually lies at the core of the immigration stupidity.

It means first, giving away our existing infrastructure free. It then requires the previously resident population to pay for most of the new infrastructure, even on the dubious assumption that newcomers all get jobs and pay taxation relatively pro-rata to the previous population.

McCrann makes a lot of excellent points. Australia’s immigration intake and population growth has indeed been on “steroids”:

In the 12 years to 2016, Australia’s net overseas migration (NOM) averaged an insane 210,000 people a year, which is roughly triple the average of 70,000 in the century following Federation. Moreover, this turbo-charged migrant intake is projected to continue until mid-century, effectively adding a Canberra to Australia’s population each and every year, or a Perth every five years, over the next three-plus decades.

Sadly, Australia’s per capita GDP growth has plummeted over the past 12 years just as immigration has boomed. In fact, long-run trend per capita GDP growth has cratered to levels below the early-1980s and 1990s recessions:

To add insult to injury, real per capita wages & salaries have also fallen nearly 2% over the decade to March 2017:

When you add negative externalities, such as increased congestion in our major cities, the need for expensive new infrastructure to be built (paid for largely by the incumbent residents), smaller and more expensive housing, as well as damage to Australia’s natural environment, then it is clear that Australia’s “policy of immigration-on-steroids” is wrecking living standards.

McCrann’s comparison with Japan is also apt. Too often country’s like Japan, which have declining populations, are derided by Australian commentators as being economic basket cases. Yet, the data does not support this view.

As shown in the next chart, there were five OECD nations that experienced declining populations between 2003 and 2015. These are charted below against Australia’s mass immigration population ponzi:

ScreenHunter_15564 Oct. 18 16.58

If it was true that population growth was such an economic boon, then you would expect that GDP per capita would have experienced anaemic growth in these countries. And yet the data shows anything but, with the nations experiencing the biggest population declines – Hungary, Germany and Estonia – experiencing stronger GDP per capita growth than Australia:

ScreenHunter_15566 Oct. 18 16.59

Australia’s GDP per capita growth also arguably flatters Australia, since it counts infrastructure investment that needs to be made simply to keep up with population growth but doesn’t actually benefit the incumbent population. As noted by Dr Jane O’Sullivan last year:

“Capital widening”, just to build more stuff so that a growing population maintains current levels of access to schools, hospitals and sub-30-minute commutes, is recurrent spending. It yields no improvement, from which its cost can be repaid. This is a major blind spot on economists’ analysis of population growth. If you’re going to count a new hospital on the positive side of the ledger, you need to count the crowding of the old one by population growth as a cancelling negative. Quick check: would we be no worse off if we didn’t build it? If the answer is yes, then it might be an investment. If no, then it’s a recurrent cost.What’s more, all that “capital investment” just to stand still is GDP that doesn’t enrich the existing citizens. It’s undertaken just for the sake of the people being added. If we were really interested in how the headline metrics relate to wellbeing, we should deduct the cost of “capital widening” from GDP (about 6.5% of GDP per 1% population growth rate) before dividing the rest per capita. Or better still, do that to Net National Income.

Then there’s the issue of unemployment, whereby Australia’s rate has sat above Japan’s for more than a decade:

Terry McCrann is spot on. Living standards of the incumbent Australian population is the threshold issue in the immigration debate. Living standards in the major cities are unambiguously being eroded by mass immigration via negative externalities that are not captured in the national economic accounts, such as increasing congestion, falling housing affordability, environmental degradation, etc.

Moreover, pursuing mass immigration is a growth fig leaf for governments and associated rent-seekers to pretend they’re doing the job rather than pursuing the more difficult but ultimately much wider benefits of productivity-directed reform.

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Comments

  1. “The ‘‘Big Australia’’ debate has belatedly got under way.”

    It was underway after Rudd said “I want a big AUS” and there was talk of winding back immigration so that infrastructure and services have a chance to catch up.

    (Not to mention, it was hard to get a job in 2007, 2009 and since)

    Then Gillard lied on TV about not wanting a big AUS. Then gave 457 visas to KFC and Pizza Hut!

    I do not know if she was stupid or stupid and corrupt.

    • mild colonialMEMBER

      I distinctly remember how her first statement was on setting a population policy because even then i knew it was a taboo topic and i was really surprised. And then silence. She must have had polls that said it was the highest rating issue and then advisers who immediately said shut up, we dont talk about that.

      • Well I remember Abbott saying a few times “specify a number” (how many would you let in per year).

        She refused to specify a number.

        So I guess she was always going to embrace mass low-wage immigration.

        And before the 2013 election, she said “oops, I printed too many 457 visas”.

        It is a miracle that Japan is allowed to have a shrinking population!

      • The “Julie Bishop Glorious Foundation” welcomes the record number of Chinese immigrants that arrived last year.

        We get the politicians that the Chinese government pays for.

  2. Good to see that the discussion is broadening but don’t underestimate our pollies capacity to talk big but do nothing.

    The ‘training and education’ lobby depend on the offer of an almost guaranteed “ticket in the door” to sell their dodgy product.

    Plus there are all those employers who prefer dealing with effectively “indentured” guest workers who they can keep under the thumb.

    Plus there are those big end of town types (and their middle management minions and professional service providers) who like larger consumer head counts provided they don’t get to live in their ‘village-like’ “gated by heritage values” communities in the inner suburbs.

    The re colonisation of Newtown, and other formerly ‘ethnic’ inner suburbs in Sydney, by well paid Anglos is almost complete. They like massive rates of immigration, just not in a postcode too close to where they live. New folk opening new foodie experiences are the exception and are welcome of course. Diversity is sooo tasty.

    • Education does not require the citizenship sell at all. If immigration is cut then asset prices and the dollar will fall. Eductaion and training will see an huge improvement in competitiveness. It will boom, just as it did when the currency fell below 90 cents.

      • ‘…. then asset prices …..will fall……’

        Hush! I thought you were trying to make a case for reduced immigration.

        Mr Morrison, the RBA and APRA will not be amused by such crazy talk.

        They may not care if the $AUD falls but they care very much about asset prices and the credit creation it drives.

      • “…Eductaion and training will see an huge improvement in competitiveness…”

        Lets assume that the $AUD does fall despite the best efforts of foreign central banks, asset and IOU flogging aussies and sticky conmodity prices. Can we be sure that demand for our education sector will hold up without the DUAL carrots of access to our market for existing property and permanent residency?

        Time is moving on quickly. The PR recipients I have interviewed lately love telling me how good the Chinese unis are getting and how quickly.

        How many Australian families send their kids off shore JUST for an education.

        We may find that our carrots are critical to charging through the nose.

      • kiwikarynMEMBER

        But they don’t come here for the sub-standard education, they come for the Visa. If they were interested in actually being educated, they would go somewhere with reputable institutions.

      • I don’t think that is correct. Those I know in the education sector, all milking the immigration cow, say that the drawcard is prospective citizenship, not the qualification. Further, a friend on an immigration tribunal recounts that even the students view their own training and qualifications as rubbish, worthless even in their home country. Note this is largely about the VET sector, where the vast volume is transiting, rather than university degrees or especially post-grad where there is real value in the qualification and the prospective citizen.
        .

    • Much of what you assert is the result of having a co-opted opposition. That’s why I intend to vote one nation

  3. St JacquesMEMBER

    Haha, I mentioned that things generally were going ok in Japan some weeks back in an argument here, and suddenly the whole country is looking at Japan v us (and the West). lol No, more seriously, keep up the good work UE, years of banging the drum and it’s starting to filter through at last. But I guess what really underlies this change in opinion is that what MB and others have been warning would happen is now undeniable, people are feeling it on the roads, trains, schools, hospitals, community services, in housing affordability and standards, and over the last five years, an unprecedented weakening and now outright decline in wages during a non recessionary period, in fact the very same phenomena that has been playing out in the US and UK for decades, though disguised by years of population-debt Ponzi economics. In Oz and Canada these failings were hidden by the China led resources boom, but now that is faltering, the utter failure of neoliberal orthodoxy is there to be revealed in all its glory. There is no where left for the neoliberals and their corporate masters and the global elite it serves to hide. But much hard work removing this filth lies ahead.

  4. “It means first, giving away our existing infrastructure free [to immigrants]. It then requires the previously resident population to pay for most of the new infrastructure, even on the dubious assumption that newcomers all get jobs and pay taxation relatively pro-rata to the previous population.”

    He had to taint otherwise excellent article with a phobia.
    Immigrants bring high education “for free”, where’s mention of that?
    As per this logic, newborn also get the infrastructure free and previously born have pay for most of it….

    It is this kind of excrement that lables Aussies ______-phobic.

    • fitzroyMEMBER

      It’s not a phobia it’s a fact. The cost of defence, health, education legal system, public service and political system is thrown in for free. Australian has plenty of labour, and unless you are a research scientist or an entrepreneur your education doesn’t add much to the country.

  5. 1. You consistently leave out the denominator from your annual change in immigration charts. 70,000/ 10mn 50 yrs ago is .7% increase in population from NOM per year and 210,000/ 24mn is .87% increase in population from NOM per year. So this doesn’t look like a problem to me. Just what are you on about then Leith?
    2. You leave out other countries from your real per capita charts. How did they do in this period. I imagine not too well into 2008 at least when inflation was rising. And poorly after that from the GFC??
    3. Your GDP per capita chart which includes other countries shows Australia is doing OK. So again, where is the problem?
    4. I am very wary of you blaming immigration for things like high home prices when there are other, better explanations. Like tax settings and chinese speculative buying. I would be more impressed by some econometric dis entangling of these issues.
    5. There are other imperatives in the immigration debate like security (see this string of opinion on the weekend. https://www.macrobusiness.com.au/2017/07/weekend-reading-15-16-july-2017/#comment-2916364) and of smoothing out the demographic profile of our aging population.
    6. I agree with how wrong it is that immigration has been the play thing of real estate developers (and other rent seekers) and politicians (growth fig leaf) if indeed that has been the case as does seem likely. My response is not to shut down immigration but to agree with your point and then after exposing rent seekers and those politicians to then go on and ask: are there other reasons for and against it?

    • “1. You consistently leave out the denominator from your annual change in immigration charts. 70,000/ 10mn 50 yrs ago is .7% increase in population from NOM per year and 210,000/ 24mn is .87% increase in population from NOM per year. So this doesn’t look like a problem to me. Just what are you on about then Leith?”

      It’s numbers that matter, not growth rates. Using your twisted logic, population growth of 600,000 a year in 2060 (when Australia’s population is projected to hit 40 million) would be fine because it would represent the current population growth rate of only 1.5% per annum. By the end of the century, when Australia’s population is projected to hit 70 million, annual population growth of 1,050,000 would be fine, because this would again represent the current population growth rate of only 1.5%.

      “2. You leave out other countries from your real per capita charts. How did they do in this period. I imagine not too well into 2008 at least when inflation was rising. And poorly after that from the GFC??”

      No. I included all OECD nations with falling populations over that period. Most performed much better than Australia, as I showed clearly.

      “3. Your GDP per capita chart which includes other countries shows Australia is doing OK. So again, where is the problem?”

      GDP per capita doesn’t include the huge costs associated with mass immigration, such as congestion, more expensive infrastructure (due to dis-economies of scale), smaller and more expensive housing, and environmental damage. What’s the point of juicing the economy via mass immigration if it is lowering living standards?

      “5. There are other imperatives in the immigration debate like security”

      Wars are not won on man power, but by technology and alliances. So what’s your point?

      “6… My response is not to shut down immigration”

      Nor is it mine. I just want it returned to historical levels to reduce strains on infrastructure, housing, the environment, etc.

      • 1. Whatever, .87% Vs .7% is stuff all difference. Admit it. And your unfair use of 1.5% in 2050 is a lot more than a .17% increase. And why does the number matter more than the proportion?
        2. You didnt answer my point. There are no other countries shown in the chart for real gdp/ capita
        3. Again, you didnt answer my point. Our gdp/capita is going just fine.
        5. Who says there isnt a critical mass of total gdp and population which can be sufficient to deal with future security threats wherein current alliances may not exist?
        6. Again, you want to do this when there may be many other factors involved. What about low infrastructure spending?

    • The Patrician

      “70,000/ 10mn 50 yrs ago is .7% increase in population from NOM per year and 210,000/ 24mn is .87% increase in population from NOM per year. So this doesn’t look like a problem to me.”
      Ponzi logic in its purest form
      “There are other imperatives in the immigration debate like security”
      Of all the stupid justifications for our recklessly excessive population growth, invasion is the most stupid.

    • Now add 420,000 student visas, 120,000 457 visas and 30,000 family reunion visas a year in top of that and you get the real number and the real effects it has on the country.

    • I think that Jessica ought to title her opinion-torials so that it makes reference to two things: her mortgage and her fear of being fired if she doesn’t write what she’s told. So that article would be more aptly titled as “How my big mortgage and my job insecurity have taught me to love big-australia and why I beg you to love it too, because if you don’t I cop it in the neck…”

      • Ha ha this. Poor Jessica. Being a spruiker for the elite must be a shitty job. No doubt she went into it with good intentions.

      • blakemorrowMEMBER

        Definitely not defending her, but accuracy is important. Didn’t she state she doesn’t own property recently?

    • stagmalMEMBER

      i love how you can get away with racism like taking a picture of white ppl and calling it ‘monochromatic’ … oh no 1970s aus had more white people than now, what a hellish place!!

      • I really do wonder how Aboriginals feel about immigration. On the one hand, it might be easier to identify with other minorities, on the other its probably politically negative for Aboriginal issues given that new migrants won’t have any white guilt to tap. If we achieve ‘big Australia’ nobody is going to care for the Aboriginal’s causes because they’ll just be one of hundreds of minorities trying to be heard.

      • I agree Stagmal it’s very offensive, I grew up with that Talent Time lot, fond memories.

        As for Aboriginals they are on side with the fake left from what I can see. Anything to hurt whitey, even if it hurts them too.

      • @Fekname. AS far as I’m concerned anyone who has migrated to Australia since 1788 has benefited from the dispossession of indigenous Australians. The more recent migrants can console themselves with their ethnic group not being responsible for the stolen generation and other specific policies enacted prior to their arrival but they still benefit from from the dispossession of the people who were here before modern Australia was founded. Any migrant from any ethnic group who claims otherwise is deluding themselves.

        I would explain this to my Chinese students in Beijing who were interested in migrating to AUS/CAN/USA/NZ and I basically said that they would have to take some responsibility for the dispossession of those country’s indigenous peoples, and the continued poverty/exclusion etc., if they migrated, therefore they should be aware and sensitive to issues concerning indigenous peoples and they had a duty to educate themselves about it. After thinking about it, my students found this to be reasonable.

    • Wow that’s a bad article. Clearly it’s a headline looking for an article. Because the arguments don’t support (actually aren’t relevant to) the general statement.

    • Trofim Lysenko

      The media is incredibly important. The problem is the media is incredibly self important. Couldn’t care what those typists think.

    • Hunter80MEMBER

      I will never understand the logic of allowing immigrants to bring over their elderly parents.

      I have never heard of an Australian moving overseas and then bringing over their folks.

      If you can’t handle being away from your family, perhaps stay where you are.

  6. “First they ignore you, then they say you’re mad, then dangerous, then there’s a pause and then you can’t find anyone who disagrees with you.” Tony Benn

  7. 2big2failMEMBER

    One has only to look at Perth real estate prices and compare to Sydney to realize that something is seriously wrong with the way things are managed in this country. Time to declare Sydney “Full” and direct all new (and reduced) immigration traffic to other less populated cities. Over time, less populated cities will become larger and their economies will expand and they will become a viable alternative to Sydney/Melbourne (for everyone). states should explore tax advantages.. It’s not rocket science..

    • kiwikarynMEMBER

      Not just real estate prices. Did anyone else notice that foreign student enrolments in WA have also fallen by 12% this year? Seems when there are no rocketing house prices that immigrants simply dont want to move there.

      • Number of foreign student enrolments is always directly proportional to the number of off-the-plan apartment developments on offer…

      • Another thing is that the premiere recently shut the door on 457 visas. You watch the students not come here when there is no path to work and PR.

  8. hareebaMEMBER

    I spotted Shane (Kipron) Oliver, Chief Economist, AMP in my local Woolworths yesterday.

    I approached him, introduced myself, and questioned him about immigration levels and the effects they are having on standards of living and housing affordability. I channelled my inner MB.

    I questioned him about the current population ponzi.

    The lame bullshit he came up with in reply should be no surprise but nonetheless i walked a way thinking he probably doesn’t give a fuck and he was just talking from the hymn sheet. He vomited up stuff about it being ‘a land supply/release issue, we have always had high immigration and current levels are not inconsistent to historical norms etc.

    He kindly acknowledged that infrastructure had not kept up with population growth.

    I asked him why we wanted/needed a big Australia? He mumbled some unconvincing bullshit back.

    I wish i had challenged him about GDP per capita and that current immigration levels are way above historical norms.

    I think when i first approached him he was flattered that someone recognised him. He probably thought I was some uninformed wombat ….. a few minutes later he was squirming.

    My final feeling was that most of these participants such as politicians, commentators and least of all private operators just don’t give a flying fuck about how this is playing out. All these cunts live in wealthy areas and although they to are touched by greater congestion it is to a lesser extent.

      • Oh – this is gold:

        What do you do to relax?

        I try to build it into my day by catching the ferry into the city. Driving or catching the bus from Avalon would be very time-consuming and stressful.

        Gee-whiz mister and golly-gosh… now, why would that be like that? I guess it’s one of those “natural mysteries”: beautiful and mysterious at the same time. Nooobooody knoooooows!

    • You’re brave. I saw Pascoe at the airport once. Buried in his phone at the baggage pick up. He needn’t have worried I’m not the sort to bug famous people.

      • AlbyManglesMEMBER

        Are you sure it wasn’t just the flashing light signaling the conveyor is moving

      • @AlbyMangles

        Oh, you evil, evil man! 😀 I just had a few pascometers fly past me the other day: weeeoooo-weeeeeooooo! 😀

      • hareebaMEMBER

        C’mon Owen.

        You talk a good game …. it ain’t that hard giving it to these bludgers. I actually go out of my way to give it ‘these’ people. If i saw Abbott or Rupert Murdoch …. and i had the opportunity …. i would hang my knob out and piss on their shoes. You can add add John Symonds and Kipron to that list.

        I love a confrontation with fuckwits. Put them in their place. Someone has to stand up these mindless bullies. Seriously if I saw that Abbottt clown … it would get ugly.

      • If only there were more like you Hareeba I find my view is in the minority in my circles. Bunch of half wit middle aged and older teenagers. Lol love to see you piss on their shoes.

    • blacktwin997MEMBER

      +1000
      hareeba, i solemnly salute you as Master Haranguer of Cunts 🙂

      Seriously if they can’t mount even a modest defence of their ridiculous ponzi plan when earnestly confronted by an (admittedly more informed) member of Joe Public, then what are they being paid for?

      • hareebaMEMBER

        I have my faculties intact but do possess a healthy dose of psychopathic tendencies. But unfortunately not enough. Otherwise i would carry out my desire to torture and kill many of these grubs. There are so many of them i shall need a lot of bullets.

        On my epitaph it would hopefully read …. ” he had a great square cut and pull shot, did alright with the ladies but most significantly he was a man of the people who eradicated a lot of rent seeking parasitic greedy garbage that was impinging on the hard working majority”

        I mean seriously if a few of these scum ‘disappeared’ i would think many an average Joe would be pleased. Now where did i put my silencer ….

      • blacktwin997MEMBER

        Straight up, you’d have popular support in spades even if you started with a modest subset of these expensive worthless fucktards (Andrew Robb, Shane Oliver, Harry Triguboff, Sam Dastyari, Ed Husic, Josh Frydenberg, John Howard, Kevin Rudd plus Penny Fucking Wong, Tanya Plibersek and Julie Bishop because diversity). Save you some ammo and the taxpayer some bucks into the bargain.
        However no doubt this would cause another pointless round of gun debates/buybacks and sully the name of responsible firearm owners. For this reason i’d just recommend we don niqabs and use claw hammers and kitchen cleavers, not only more graphically satifsying but adds a whole new dimension of ‘Ban the Burqa’ and ‘Kitchen Implement Home Safety – Is It Enough?’
        Excellent epitaph by the way, we should have an MB epitaph fund so we can immortalise the actions of the brave patriotic few who not only recognised but also took effective action to permanently neutralise the plague of expensive parasitic cunts.

  9. Australia is busted.
    Sheep that keep voting for the ALP and LNP who BOTH want a Big Australia.
    You vote for these 2 parties, then how dare you complain about overpopulation in our cities.
    It is the Big Australia agenda pushed by BOTH the ALP and the LNP that have fucked this country.
    So sit back and enjoy what you fucking voted for.

    • Steernorth, I agree that Australia is busted and I certainly agree that both ALP and LNP both want a Big Australia, but no one voted for that policy. I’d say the majority of voters don’t realise there is an alternative, and have voted for either of the two majors (or Greens) for some other reason. None of the parties actually put the Big Australia on their list of promised policies – it’s just assumed that they would persist with this policy AND that we have to suck it up because it’s good for us.